The board of directors of Loews Corp. today approved a plan to spin off its entire ownership interest in Lorillard, Inc. to holders of its Carolina Group stock and Loews common stock in a tax free transaction.

As a result of the transaction, Lorillard, presently a wholly owned subsidiary of Loews, would become a separate publicly traded company.
Loews said it will redeem all Carolina Group shares in exchange for Lorillard stock. The Lorillard shares to be distributed in the swap account for 62 per cent of Lorillard.
The remaining 38 per cent of Lorillard would go to holders of Loews shares. Loews said it would either swap that holding for Loews common shares "if market conditions are acceptable," or, if the swap is not fully subscribed, it will distribute the 38 per cent of Lorillard to Loews holders as a dividend.
Conditions include receipt of an Internal Revenue Service ruling that the deal is tax-free to holders, clearance by the Securities and Exchange Commission, and others. Loews hopes to close the spin-off in mid-2008. Loews expects that Lorillard's common stock will be listed for trading on the New York Stock Exchange.
Loews currently has two classes of common stock outstanding: Carolina Group stock, which is intended to reflect the economic performance of a group of assets and liabilities called the Carolina Group, principally consisting of Lorillard and its subsidiaries; and Loews common stock, representing the economic performance of the remaining assets of Loews, including the interest in the Carolina Group not represented by outstanding Carolina Group stock. (ci)